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Business Tax

Small Business Benefits to Hiring 1099 Workers

By January 31, 2013No Comments

It looks as though hiring 1099 workers, also known as contract workers, or even freelancers, is on the rise and will continue to rise in 2013.  According to a global study completed by of the 1500 firms interviewed 73% will have hired more freelancers in 2012 than in 2011.  The majority of these workers are those having particular skills, like web programmers, graphic designers, or multimedia experts.  These skills are obtained through years of education and cannot easily be trained, increasing the appeal of hiring such workers by small business owners.

One study found that there are currently 16.9 million independent workers in the United States, and that number is expected to grow to 23 million in the next 5 years.

So why is the trend growing and why do employers expect to continue hiring more 1099 workers?

These workers have shown to be effective in work places while lowering costs for small business owners.  Employers have flexibility in the type of workers they hire for any given season or project allowing them to more fully focus labor resources on the most business effective task.  Businesses can bring on an expert in their field immediately without consideration for internal resources.  This allows them access to industry expertise without the high expense of hiring an employee full time.

In addition, since these workers are not formal employees, employers are saving money on benefits and taxes.  This saves money in long term compensation costs as well.

Many contract workers, depending on the workload, are increasingly being hired to do work from home.  This saves additional money in office space and technology as these things are provided by the workers themselves.

Diversified Resource Business Solutions can handle all sorts of payrolls issues, including payroll for 1099 workers.  Our reports are easy to understand and will come regularly so you know where you stand.  In addition, we can provide all those special reports the government requires to ensure your 1099 workers are independent which will help you avoid tax and legal consequences of inadvertently crossing the line from 1099 independent contractor to employee.

For more information on our payroll services, please contact us today!